Transcentury shares to delist after burning investors
Transcentury shares listed in 2011 at a price of Ksh50 apiece. A string of losses has left the company struggling to raise additional capital to finance new investments. The board counts on delisting to turnaround Transcentury’s fortunes.
|Transcentury CEO Nganga Njiinu (left)|
Transcentury Ltd (TCL) shares soared last week after the investment group revealed a plan to go private and delist its stock from the Nairobi Securities Exchange. Transcentury shares popped up 9.32% on Thursday (July 9) to close at Ksh1.76, the day the group’s board announcedthe delisting plan. The shares jumped 9.66% on Friday (July 10) to wrap up the week at Ksh1.93.
The delisting of Transcentury shares is poised to leave investors licking their wounds. Transcentury went public in July 2011 at a price of Ksh50 a share. At Ksh1.93 a share currently, investors who purchased Transcentury shares at Ksh50 apiece have lost more than 96% of their investment.
Transcentury delisting shares to attract more financing
Transcentury makes money from mostly investing in other companies. Its portfolio companies include East African Cables Ltd (CABL), Kewberg Cables and Civicon Kenya. The group has fallen on hard times in recent years amid a string of financial losses. For example, Transcentury has not turned an annual profit since at least 2015. Moreover, the group’s revenue has been shrinking.
Amid the losses, one of Transcentury’s greatest problems lately has been the inability to raise enough capital to invest in areas it believes will generate good returns. Therefore, Transcentury is delisting because investors interested in financing it would not do so as long as it remains a publicly traded company. Transcentury’s board has called a special meeting of shareholders on July 30 for a vote on the delisting plan.
Transcentury can request to suspend trading in its shares
A company can request the stock market regulator to suspend trading in its shares as it prepares to delist. For example, Kenya Airways has paused the trading in its shares as the government works on its takeover through a nationalisation process.
Kenya Airways shares had been soaring before the halt in trading. The surging Kenya Airways shares meant rising cost of taking over the airline for the government. That is because the government would be buying out other investors from Kenya Airways as part of nationalising the airline. Therefore, Transcentury may want to pause trading in its shares if the ongoing rally could complicate its fortunes down the road.